New investments slid 46% in Q3 as manufacturing, infra outlays shrank
The Hindu
Fresh investment plans in India nearly halved in Q3 2023, with manufacturing and infrastructure sectors witnessing significant declines.
Fresh investment plans almost halved between October and December 2023 from the previous quarter, with public capital expenditure projects tripping at a faster pace of almost 60%, while proposed private sector outlays fell 35%.
This marked the third successive quarter of sequential decline in new investment projects after they hit a record high in the fourth quarter (Q4) of 2022-23, data from investment tracking firm Projects Today show.
Proposed investments halved for all sectors barring electricity, with irrigation (down 75%) and manufacturing (61.5% lower) witnessing the sharpest drop.
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The decline in manufacturing investment plans came on the back of quarter-on-quarter drops of 77.6% and 2.3% in the first two quarters of 2023-24, respectively and was most pronounced in critical sectors such as automobiles (-63.8%), steel (-74.8%), and cement (-89%).
From around 30% of the ₹7.05-lakh crore of new investments announced in Q2 of this year, manufacturing projects accounted for just 21% or ₹80,000-odd crore of the ₹3.83-lakh crore investments planned in Q3. Overall investment plans dropped 45.7% quarter-on-quarter.
The below-normal monsoon which has dented rural demand recovery and the upcoming Lok Sabha election might have made private companies hold back their new capex plans for a while, Projects Today CEO Shashikant Hegde told The Hindu.
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